Freelance Forward 2022

Dec 13, 2022
Freelance Forward 2022

The unprecedented global shift to remote work created by the pandemic transformed the public’s notion of work and the workplace and has had a lasting impact on how people view their jobs and careers. With the current economic uncertainty, along with the rise of movements such as “The Great Resignation” and “Quiet Quitting,” many professionals are undergoing a once-in-a-generation reassessment of what it means to have a fulfilling career. Large swaths of the U.S workforce are questioning the traditional, entrenched ways of working, and are instead seeking out alternate career pathways. The result: in 2022, an increasing percentage of the U.S. workforce turned to freelancing opportunities to find greater professional fulfillment, flexibility and financial stability, and a new approach to managing their career trajectory.

Upwork's 2022 Freelance Forward survey, a representative study of 3,000 professionals, reveals a staggering 39% of the U.S. workforce, or 60 million Americans, performed freelance work in the past year, an increase from the year prior. At a time of economic and labor market uncertainty, Upwork’s study found American freelancers contributed approximately $1.35 trillion in annual earnings to the U.S. economy, $50 billion more than in 2021. This growth was driven in large part to professionals seeking alternatives to the traditional model of a full time, 9-to-5 job. The data shows that increasingly, professionals are exploring the benefits of freelancing, whether for extra income, autonomy or as a way to find more meaningful work.

Key findings include:

  • Freelancing remains a significant part of the U.S. labor market and economy: Freelancers contributed $1.35 trillion to the U.S. economy in annual earnings in 2022, up $50 billion from 2021.
  • Freelancing hits an all-time high: The share of professionals freelancing increased to 60 million Americans, up three percentage points from 2021 to 39%.¹
  • Perceptions of freelancing continue to shift: Nearly three-quarters of freelancers (73%) say that perceptions of freelancing as a career are becoming more positive, up from 68% in 2021.²
  • Gen Z and Millennials are the most likely to explore freelancing: In 2022, 43% of all Gen Z professionals and 46% of all Millennial professionals performed freelance work.
  • Over half of freelancers provide knowledge services: 51% of all freelancers, or nearly 31 million professionals, provided knowledge services such as computer programming, marketing, IT, and business consulting in 2022.
  • Diversified workers become more common: 17% of U.S. workers are now diversified, meaning they seek multiple sources of income from a mix of traditional employment and freelance work, up three percentage points from 2021.
  • Freelancing continues to grow among the most educated: 26% of all U.S. freelancers hold a postgraduate degree, up from 20% in 2021.

Growth in freelancing

Freelancing as a whole continued to grow in 2022. Compared to last year, an additional 3% of the U.S. workforce did some form of freelance work this year, for a total of approximately 60 million Americans or 39% of the workforce. This increase also contributed to a more significant economic impact. In 2022, freelancers contributed $1.35 trillion to the U.S. economy in annual earnings, up $50 billion from 2021.

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What's driving this growth?

Over the past two years "quitting" has dominated the headlines. Some professionals were quitting their jobs in search of more flexible and fulfilling work, others were prioritizing a greater balance between work and life, and some were exploring their entrepreneurial side and starting new side businesses. Regardless of the reason, the pandemic offered professionals a different perspective on work and careers, leading many to pursue freelancing.

More diversified and highly skilled freelancers

There has also been an increase in professionals seeking an alternative to a single employer and diversifying their revenue streams. Across the labor market, more people than ever are diversifying their income: In 2022, 37% of all U.S. professionals had more than one employer, job, or contract project, for example, holding two part-time jobs with different employers or holding one full-time job and engaging in freelance work. Diversified workers, meaning those seeking multiple sources of income from a specific mix of traditional employment and freelance work, increased to 17% of the U.S. workforce, up three percentage points from 2021.

This coincides with high levels among highly skilled and educated professionals. Over half (51%) of all freelancers provide knowledge services such as computer programming, marketing, IT, and business consulting.³ There was also a sharp increase in freelancers who hold a postgraduate degree. In 2022, 1 in 4 (26%) freelancers hold a postgraduate degree, up from 1 in 5 last year.

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While financial gain is a primary motivator for freelancing, flexibility and seeking a better sense of purpose in their careers were other driving factors. When asked about the reasons for freelancing, 'to earn extra money' (83%) and ‘to have flexibility in my schedule’ (73%) top the list.

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These factors reflect a wider shift in how people think about work. Some professionals are entering freelancing as an opportunity to take control of their careers, whether for more flexibility or greater fulfillment. Others are likely using freelancing as a potential stepping stone to a new career or look to freelancing to create more stability.

Higher satisfaction for freelancers

Although professionals begin freelancing for various reasons, satisfaction levels continue to rise, with 67% of freelancers surveyed more optimistic about their job or career opportunities as a freelancer.⁴ Two-thirds (66%) of freelancers say they feel more stimulated and 68% say they feel happier by the freelance work they do compared to a traditional job.

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Meanwhile, greater acceptance of remote work throughout the pandemic and a shift in professional's mentalities around careers is changing how people view freelancing. When asked about freelancing as a career, 73% feel that perceptions of freelancing are becoming more positive, up from 68% in 2021.⁵

Nearly three-quarters (74%) say freelancing has given them greater control over their life, while other benefits include attention to their physical health and work-life balance.

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Another spillover benefit of having a better work-life balance is in freelancer's interpersonal relationships. Across the board, freelancers say that it enables them to be available as caregivers and to spend more time on personal relationships.

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Freelancing through economic uncertainty

Freelancing provides many professionals with greater satisfaction in their careers, but it also provides professionals with a sense of stability. Despite a common misconception that a full-time job is the most stable career option, freelancers prove to be slightly more optimistic in the face of an economic slowdown.

When asked about an economic downturn in the next few years, three-quarters (75%) of all professionals said they were concerned. Freelancers were not immune to this, but many feel optimistic about the future despite the concern. Overall, sixty-nine percent (69%) of freelancers expect their income to increase in the coming year.

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This optimism may be due to the fact that 68% of freelancers have more than one employer, job, or contract project. With this diversity of income, there is less reliance on a single employer than those with a full-time job feel. Similarly, freelancers see more opportunities available. When asked about freelancing opportunities available today that were not available before the pandemic, 76% say there are more. This is compared to just 57% last year.⁶

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The increase in opportunities is likely why freelancers have a more positive outlook regarding income and job opportunities. 77% of freelancers feel optimistic about their personal income and salary increase for the coming year, and 80% are optimistic about future job opportunities. Similarly, a majority (61%) of freelancers say they make as much as or more than they would for a traditional employer.

Another possible factor in this optimism is a freelancer's ability to set their own rates. 43% of freelancers say they raised their rates during the past year. The top reasons that they raised rates were due to professional experience (39%), economic conditions (37%), their services being in higher demand (36%), and to keep up with competitive rates (34%). The ability to raise their rates is likely why freelancers are over thirty percent (36%) more likely to feel satisfied with the amount of money they make for the work they do than non-freelancers.

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The combination of positive perceptions of freelancing, more opportunities, and control of their rates, instills confidence in many freelancers.

Future of freelancing

Freelancing continues to grow as a viable career choice for many U.S. professionals, especially those seeking greater flexibility and control. It also bodes well that younger generations are embracing freelance work en masse. In 2022, 43% of all Gen-Z and 46% of Millennial professionals freelanced. The rise of influencer content is also attracting younger people to freelance. Our survey estimates that 23% of all freelancers say their work entails creating influencer-style content, which rises to 27% and 29% of Gen-Z and Millennial freelancers, respectively.

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With the continued shift in perception and the increase in opportunities, freelancing is poised for a bright future. That's why 9 in 10 (91%) freelancers believe the best days are ahead for freelancing.

About Freelance Forward:

The study is conducted by independent research firm Edelman Data & Intelligence. 3,000 U.S. working adults over the age of 18 were surveyed for it online between September 21, 2022 – October 7, 2022. Of those, 1,164 were freelancers and 1,836 were non-freelancers. Results were collected to ensure demographic representation in line with the United States Bureau of Labor Statistics’ 2022 Labor Force Statistics from the Current Population Survey and the American Community Survey. The study has an overall margin of error of ±1.8% at the 95% level of confidence. Freelancers: ±2.9%, Non-freelancers: ±2.3%

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¹ Based on September non-farm payrolls of 153 million

² For freelancers who were freelancing before COVID-19

³ Listed as skilled services in survey

⁴ For freelancers who were freelancing before COVID-19

⁵ For freelancers who were freelancing before COVID-19

⁶ For freelancers who were freelancing before COVID-19

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